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More gas available, but distribution still has weak points

Southcentral utilities are breathing a little easier about natural gas supplies with Hilcorp Energy saying it can meet demand until 2017 by producing more gas from old wells it took over earlier this year from Marathon Oil.

However, Southcentral is not out of the woods yet. There are still things to be concerned about.

The gas distribution system is still stressed under cold weather conditions, and a big concern is whether some mechanical hiccup might disrupt things, which could be bad news if it happened on a very cold winter day.

Having enough gas available is no comfort if it doesn’t show up in your home furnace.

There are scenarios in which the system could indeed be vulnerable, John Lau, Enstar Natural Gas Co.’s director of engineering, told Anchorage Mayor Dan Sullivan’s Energy Task Force in a briefing May 1.

Enstar regularly works with other utilities and Cook Inlet gas producers on “what if” scenarios to be prepared, and Lau laid out some of these to the mayor’s task force.

One possible situation is if gas production from the Steelhead platform in Cook Inlet were to be disrupted by a mechanical problem, such as a compressor failure. This has happened.

If it were to occur in late spring or summer there would be no problem as gas demand is down and plenty of gas is available.

Winter is another matter. However, now that the new Cook Inlet Natural Gas Storage Alaska, or CINGA, facility near Kenai is operating, a midwinter disruption at Steelhead could be dealt with by increased gas withdrawals from storage.

That assumes CINGSA is adequately pressured to handle a big withdrawal rate, and there could be a problem if the disruption were in late winter, when the pressures will be down.

Typically, CINGSA’s gas storage reservoir is pressured up in summer and fall as gas is injected. The pressure begins declining in late fall as colder weather sets in, demand for gas rises and Enstar and other utilities begin withdrawing gas from storage.

CINGSA just finished its first winter season in operation after construction was completed last year. It was a big help during several cold days last December when local gas demand exceeded what active wells in the region could produce.

Even so, there were challenges. One was that CINGSA was unable to get enough “pad” gas into the storage reservoir in late 2012 because of a commercial dispute with a producer.

Pad gas is used to pressure up the reservoir so that when utility customers inject gas for storage there is enough pressure to get the gas back out.

Because of the dispute, CINGSA went into its first winter season under-pressured.

Things worked out, though. Even though there was a long cold snap in December, Enstar, which was the only utility needing more gas, was able to get what it needed, which at maximum was 60 to 80 million cubic feet per day from storage, Lau said. The storage reservoir handled that.

“We were very pleased with the performance of CINGSA,” Enstar spokesman John Sims said separately. “You’re always a little unsure when it’s the first winter operating season.”

On New Year’s Day, things warmed up and it even started raining, Sim recalled, and gas needs dropped. As warm weather continued in January CINGSA was able to resume injections to build up its base.

By February the pad gas was fully in place, Lau told the mayor’s task force.

Fully-pressured gas storage is a big help to the utilities but there are still scenarios where there could be problems.

One that Lau laid out for the mayor’s task force involved a mechanical problem that would disrupt operations at the Steelhead gas-producing platform in Cook Inlet.

First, Lau described a typical winter day in Anchorage with no mechanical disruptions and temperatures from zero to 10 degrees Fahrenheit. The Steelhead platform produces normally at 30 million cubic feet per day in this scenario, and the utilities withdraw gas at about 49 million cubic feet daily from CINGSA.

If it were colder, with temperatures to 20 degrees below zero, overall gas demand would be up and the draw on CINGSA would increase to about 124 million cubic feet per day, again with no mechanical problems, Lau told the mayor’s task force.

Then, if the Steelhead platform suddenly went down and its 30 million cubic feet a day were lost to the system, CINGSA withdrawals would ramp up sharply to 154 million cubic feet per day to cover the gap. This assumes, however, that CINGSA is pressured up enough to withdraw gas at that rate.

Timing is important on this point. If the weather were very cold and the event occurred in mid- or late winter, when the storage pressure in CINGSA is drawn down, the local utilities would barely be able to get enough gas volume out of the storage facility to cover daily needs.

If something else happened, as a mechanical problem elsewhere in the system, “the power plants quickly go to diesel,” fuel, Lau said, so that available gas could be diverted to Enstar’s system.

Currently only Anchorage’s city-owned Municipal Light and Power can switch to diesel in its plants, although Matanuska Electric Association’s new gas-fired plant at Eklutna, now in construction, will also be able to switch to diesel when it goes into operation.

Another potential mishap involves a compressor failure at the east end of the twin 10-inch gas pipelines crossing Cook Inlet, the Cook Inlet Gas Gathering System, or CIGGS.

The compressor is undersized and needs to be beefed up, and a backup unit needs to be in place, Lau told the mayor’s task force. This now constitutes a weak link in the system, he said. It would take about $10 million to $15 million to do this, Lau told the task force.

Despite possible problems like these, the Cook Inlet gas pipeline system is in good shape and there is a lot of flexibility built in to handle unforeseen problems, Lau said.

A recent improvement in the system that is critical was to make the two cross-Inlet 10-inch pipelines bi-directional. Previously they flowed only one way, to bring gas from the west side of the Inlet to the east side to the Agrium Corp. fertilizer plant. That plant is now closed.

Converting the one-direction flow to two-direction, which was done with a recent state appropriation, made the Inlet’s pipeline system into a loop.

The east side pipelines to Anchorage from the Kenai Peninsula include two pipelines, one 12-inch and one 16-inch, both built by Enstar years ago to serve Anchorage.

On the west side of the Inlet, a 20-inch pipeline was built to carry gas from the west side offshore gas fields to the Beluga power plant and the Beluga gas field, also on the Inlet’s west side. The Beluga gas field was connected by pipeline to the Matanuska-Susitna Borough and to Anchorage from the north.

Over time, things changed. As the west Inlet gas fields declined, spare capacity developed on the west side Beluga pipeline. On the east side of the Inlet, however, new gas development on the Peninsula meant that the 12-inch and 16-inch east side pipelines to Anchorage became full.

By making the cross-Inlet pipelines bidirectional, the producers and utilities were able to circumvent the east-side bottleneck by sending gas west and then north through Beluga and Mat-Su, so that gas came to Anchorage from the north.

However, when the project to make the cross-Inlet pipelines bi-directional was done the compressor should have been beefed up, but it wasn’t, Lau told the mayor’s task force.

One other concern for Enstar is that its oldest pipeline, the 12-inch, will have to be replaced at some point and this will be a major project. Also, it crosses Potter’s Marsh in south Anchorage, an environmentally sensitive area.

Meanwhile, from a pipeline integrity standpoint, the Southcentral gas pipeline system is in good condition, even though some of it is decades old. When its construction started in the 1960s, the builders were able to take advantage of the latest in pipeline technology, using modern, high-resistance welded steel pipe, Lau said.

Some of the highly-publicized gas pipeline failures in the Lower 48 states, which caused spectacular explosions, involved older pipeline technology, Lau said. The Southcentral Alaska pipelines are much safer.

Another advantage is the dryness of Cook Inlet gas, with water content typically at 4 pounds per billion cubic feet compared with 7 pounds of water per billion cubic feet in gas produced in other states. Because water encourages corrosion, this has helped the Southcentral gas pipeine.

A good cathodic protection system and good soil conditions also helps, Lau said. Also, there is no hydrogen sulfide in Cook Inlet gas, which can contribute to corrosion if it were present. Over the years there has been only one gas pipeline rupture, at a washout on the Susitna River in 1993, Lau said.

Enstar also initiated a “pigging” program in its pipelines after federal pipeline safety legislation went into effect in 2003, doing internal pipe inspections with “pigs” or instrument devices moved through the lines. The program started in 2005 and was just finished in last year.